Hot Stock Tips - Jumping Stocks

Rakesh Jhunjhunwala‘s Hot Stock Tips No. 1:

Don’t Look For Multi-baggers Stocks

Rakesh Jhunjhunwala‘s first investment mantra on how to find multibaggers is surprisingly different from what you would expect. Rakesh Jhunjhunwala says: “Don’t look for multibaggers. Don’t seek them at all. Let the multibaggers come to you!”

What is Rakesh Jhunjhunwala saying?
What Rakesh Jhunjhunwala is saying is: Don’t go out into the investment world saying “I only want to invest in potential multibaggers“. Instead, Rakesh Jhunjhunwala, the Investment Guru, says “Go back to the old-fashioned way of making investments designed by investment maestros Benjamin Graham, Peter Lynch and Warren Buffett“. “If your homework is right and you have invested in fundamentally sound companies with good growth prospects, your investments will by themselves become multibaggers with the passage of time“.

Sounds simple but Rakesh Jhunjhunwala is not content with giving abstract or theoretical advice because this great investment legend already knows that his disciples are a bunch of doubting Thomas and even his words of undeniable gospel will be met with stoic skepticism.

Rakesh Jhunjhunwala‘s Tip No. 2:

Forget ‘Large Cap Stocks, Small Cap Stocks’ Nonsense – Look For Scalability Of Operations: Rakesh Jhunjhunwala makes two very important points. First, the investing maestro expresses his contempt for the obsession that many analysts and investors have for the debate on whether large cap, mid cap or small cap stocks are better. “Forget all that and Look for Value” he thunders. “If there is value in Large Cap, buy it. If there is value in Small Cap, buy it. But don’t obsess on irrelevant matters“, says Rakesh Jhunjhunwala, the one with infinite wisdom.

But Rakesh Jhunjhunwala makes his preference quite clear. He says that given a choice and all things remaining equal, a mid-cap or a small-cap is a preferred bet because the valuations will be low and they can scale it up quite quickly.

Buying Hot Stock Tips :

* Buy what you know : Never get a stock as you heard that its price will go up mothers and fathers, mates and even brokers are good folk but many of them will give you wrong advices therefore leading to throwing away your money.

* Don’t worship charts : Technical research is only helpful for establish the timing to buy something you already intended to buy, rely on technical research alone and you are ruined.

* Avoid frequent trading : I have met plenty of day traders but I never met someone that realized any gains over the period of 5 years. I have seen some make fifty percent gains in few months and one or two years later they went bankrupt. Day trading is betting, frequent trading is like coin tossing so take care you avoid both.

* Buy and hold : When you find a great opportunity hang on to it, the majority who trade sell their stocks when they gain five pc or more while if they’d waited for few months they might have sold it with 40% and 50% gains. When you purchase a good stock permit it to move up in price by clinging on to it at least for few months. By selling prior to the stock reaches its potential price you’ll be squandering precious time and minimizing your profits.

* Avoid over diversification: Warren buffet, the wealthiest man in the world who made his cash from investment once announced that diversification is only good for people that don’t know what they are doing, if you’re certain that you know 5 good stocks then have religion in yourself and distribute your money among them rather than purchasing 30 random corporations that you know less than nothing about. Diversification can scientifically cut back your returns particularly when you believe that few stocks will go up in price by a good percentages.